HTC's India exit result of failure to judge Chinese competition

It now looks like HTC is planning to exit the Indian market altogether, according to a report on Economic Times.

Earlier this year, HTC sold off its design team to Google for $1.1 billion.

According to a Counterpoint Research report, HTC has less than 1% share in India, while Samsung, Apple and China's OnePlus dominate the INR 30,000-plus premium smartphone market in India, together accounting for 95% of the market. The Taiwanese firm has also asked most of its 70-80 member Indian team to leave, the sources say. The company is now laying off 1,500 employees, and its June sales were down 68% from a year ago. The company is stopping all its distribution agreements.

However, HTC is not yet completely dissolving the Indian operation completely. The company plans to sell virtual reality devices from Taiwan. "This will be like an extremely small business".

Original article, 07/19/18 at 6:53 a.m. ET: HTC's financial struggles have been well-documented in recent years and it seems like the company's woes are continuing as it will reportedly halt smartphone operations in India.

Another source said the company might re-enter the market as an online exclusive brand (akin perhaps to Huawei's Honor). Gadgets 360 also got the same response. Also, the recent reduction in workforce in the India office is created to "more appropriately reflect local and regional conditions", according to the spokesperson. "There are still more than ten employees in the India office providing full functionality", the representative said.

In a statement to Economic Times, an HTC spokesperson said that the reduction in the workforce was a reflection of "local and regional market conditions", and that the move will allow HTC to enter a "new stage of growth and innovation".

Although HTC may be on the lookout for a way out, it might face legal hurdles as distributors are already gearing up for taking action against the smartphone manufacturer for non-payment of dues and not compensating for the stock in trade. The major retailers of the company's smartphones in India are the Optiemus Group, MPS Telecom, and Link Telecom.

A distributor of HTC remarked, "HTC owes money in several crores".

The HTC spokesperson said the company is aware of the potential disputes, but can't comment on the matter till it has full details.

HTC had also recently announced plans to lay off 1,500 workers, one-fifth of its total workforce.

For all of its missed opportunities in India, HTC managed to see a decent amount of success in the mid-range segment its Desire series. The last HTC flagship to launch in India was the HTCU11+ in February. We are laser-focused on creating and delivering more disruptive technologies and building our brand through the innovative, high quality products that our customers expect. The company, once the top Android smartphone vendor and the maker of the first Android phone, has significantly lost out in the Android smartphone market.